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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (31749)	1/26/2003 2:08:22 PM
From: kech	Read Replies (1) \| Respond to of 197225

Why is European ARPU low? Some say it is in part because both calling and received calls count as billable minutes in US. Apparently in Europe only caller pays. But as you point out, the rates are also much higher than in the US. This in part is due to less competition and more of an oligopoly there than in the US where there are as many as 6 national players - VZ, Sprint, ATT, Cingular, Nextel, T-Mobile, as well as other regional players like Alltel, Quest etc. So more competition means lower prices and higher use. With elastic demand for mobile services, lower prices can be consistent with both more use and more ARPU. I also think that Europeans use more SMS than in the US which doesn't count as airtime, but should count as part of ARPU. In addition of course, using GSM they don't have the capacity available in US so higher rates and less use. Unfortunately, probably also higher profit without this competiton which allows some errant players to fund $30 billion forays into the US market like T-Mobile which is only worth $12 billion today. (This last point is probably controversial to some). All IMHO!